NOVEMBER 2007 BAD FAITH CASESRESERVES NOT DISCOVERABLE WHERE CLAIM DENIED; ATTORNEY-CLIENT PRIVILEGE NOT WAIVED BY AFFIRMATIVE DEFENSE BUT ADVICE OF COUNSEL NOT RAISED (Philadelphia Federal

In Oak Lane Printing & Letter Service v. Atlantic Mutual Ins. Co., defendants stated that they were not asserting an advice of counsel defense.  Plaintiffs claimed that by simply answering the complaint by defendants alleging that they acted reasonably and in compliance with the law that attorney-client communications during the claim adjustment period were discoverable.  The court disagreed, finding that in simply pleading that it did nothing unreasonable, absent an advice of counsel defense, attorney client communications were not put in issue by the carrier on the basis that these communications go to the carrier’s state of mind on why it believed it was acting in good faith.
In addition, the court stated that there was no automatic right to discover reserve information, but this had to be relevant to the claim, e.g., where there is a dispute over the value of the claim or a failure to settle.  Since neither was at issue in this case, discovery of reserves was not permitted.Date of Decision June 13, 2007
Oak Lane Printing & Letter Service v. Atlantic Mutual Ins. Co., No. 04-3301, 2007 U.S. Dist. LEXIS 42923 (E.D. Pa. June 13, 2007) (Tucker, J.)
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